I will protect your pensions. Nothing about your pension is going to change when I am governor. - Chris Christie, "An Open Letter to the Teachers of NJ" October, 2009

Sunday, June 30, 2013

Charter Schools, Pitbull, & Money, Money, Money

UPDATE: Mother Crusader has started a petition calling for Secretary of Education Arne Duncan to cancel his appearance at NAPCS.

I want, I need, I like to get

Money, money, money, money

I want, I need, I like to get

Money, money, money, I like

"Juicebox" by Armando "Pitbull" Perez, rapper and charter school founder

*****

Yesterday, I reported that this week's National Charter Schools Conference will feature an address by Miami-based rapper Pitbull, known for his misogynistic lyrics and dubious personal behavior.

Mother Crusader dug further into the Pitbull's past to reveal a man who most likely would never be allowed to hold a job in public education. Perhaps Amplfy's Joel Klein and Secretary of Education Arne Duncan will let us know if they think Pitbull's attitudes toward women belong in a taxpayer-funded school.

Because Pitbull, in spite of his past, will open a new charter this fall: SLAM, the Sports Leadership and Management Charter School. The school, built in the shadow of Marlins Stadium, claims it will prepare students for a career in professional sports:

“Featuring a one-of-a-kind curriculum and unmatched experiences, the school will serve as a catalyst for other sports leadership and management charter schools throughout the nation,” SLAM principal Alex Tamargo stated in a news release.

That program will include internships with Marlins executives on game days and events, such as shadowing executives during pre- and post-game entertainment, parking and customer service.

Marlins executives have quite a track record to teach students about: building a stadium partially on the public dime, hiring a foul-mouthed manager, holding the least successful opening season in a new stadium in decades, and trading away star players.

Maybe the SLAM students could teach the Marlins’ executives a thing or two. [emphasis mine]

The irony here is rich indeed. First: SLAM's founder, Pitbull, and the Marlins' staff share a predilection for salty language (please try to clean this up around the kids, folks). Second: both SLAM and the Marlins organization are textbook cases of private enterprises feeding at the public trough, raking in obscene amounts of money.

The story of Marlins owner Jeffrey Loria's rip-off of Miami's taxpayers has been well documented:

The ballpark financing agreement "sparked an SEC investigation and is considered so one-sided that almost no rhetoric sounds too extreme: The team will pay for $160 million of the $634 million facility, and compounded interest and balloon payments on one $91 million loan will end up costing the county $1.1 billion when it is paid off in 2048."

Miami mayor Thomas Regaldo [sic] said the Marlins owners "insulted the taxpayers, and then they insulted the fans ... It was: We did it to you—and screw you." Regaldo has opposed the deal, which uses various taxes to fund the stadium, since the beginning.

"Miami has a history of bad deals, but I would rank this Number 1," Regaldo said. "The residents of Miami were raped. Completely." [emphasis mine]

As we'll see below, Mayor Regalado is a bit of a hypocrite when it comes to protecting South Florida's taxpayers. But before we get to that, let's first turn our attentions to SLAM, the charter school that will be imparting the values of both Pitbull and Loria to the youth of Miami.

SLAM is part of the Mater Academy family of charter schools, a prolific network that has expanded throughout South Florida. Mater's schools are ostensibly non-profit; however, all are run by the for-profit charter management organization, Academica:

Academica’s reach extends from Florida to Georgia, Texas, Nevada, Utah and California, where the company also manages charter schools. But Academica is best known for managing four prominent school networks in Miami-Dade and Broward counties: the Mater Academies, the Somerset Academies, the Doral Academies and the Pinecrest Academies.

In the 2010-11 school year, these four chains had 44 South Florida schools with about 19,000 students.

Each network of schools is run by a nonprofit corporation, which in turn is run by a volunteer governing board. These boards set policy for the schools, and also approve the management contracts and property leases — including the land deals with the Zulueta companies. While the teachers and principals work for the nonprofits, Academica routinely vets personnel and recommends principals from within its stable of schools.

That's from a blockbuster series of reports by the Miami Herald from back in 2011. The story starts with a description of corporate culture at Academica that sounds like it came straight from one of Pitbull's music videos:

PARADISE ISLAND, Bahamas On a sun-drenched weekend in September, a group of South Florida charter school principals jetted off to a leadership retreat at The Cove, an exclusive enclave of the Atlantis resort. A Friday morning meeting gave way to champagne flutes, a dip in the pool and a trip down a waterslide. The evening ended at the casino.

Leading the toast by the pool: Fernando Zulueta, the CEO of Academica Corp., which manages the principals’ schools.

Zulueta had reason to cheer. During the past 15 years, Zulueta and his brother, Ignacio, have built Academica into Florida’s largest and richest for-profit charter school management company, and one of the largest in the country. In Miami-Dade and Broward counties, Academica runs more than 60 schools with $158 million in total annual revenue and more than 20,000 students — more pupils than 38 Florida school districts, records show.

Academica’s schools consistently get high marks for academic achievement, with some schools earning national recognition. Mater Academy Charter High in Hialeah Gardens is considered among the nation’s best high schools by U.S. News & World Report, and recently won the College Board Inspiration Award.

And despite recent cuts in state funding for public and charter schools, Academica’s schools have prospered financially: One of its chains of nonprofit schools has assets of more than $36 million, the company says.

Academica’s achievements have been profitable. The South Miami company receives more than $9 million a year in management fees just from its South Florida charter schools — fees that ultimately come from public tax dollars.

But the Zuluetas’ greatest financial success is largely unseen: Through more than two dozen other companies, the Zuluetas control more than $115 million in South Florida real estate — all exempt from property taxes as public schools — and act as landlords for many of Academica’s signature schools, records show.

These companies collected about $19 million in lease payments last year from charter schools — with nine schools paying rents exceeding 20 percent of their revenue, records show. [emphasis mine]

I have yet to confirm that SLAM is using the same real estate tactics as the rest of the Mater network; however, given the school's close ties to Zulueta and Academica, it's quite likely SLAM will follow this model. In any case, Academica will certainly reap big management fees from SLAM, just as they do from the other charters in their networks.

If you haven't read the Herald's complete series, Cashing In On Kids, you really should: even if you don't live in Miami-Dade, it's a terrific guide to the sleazy strategies used by the charter industry to manipulate politicians into shoveling buckets of money into their coffers. The Zuluetas, for example, are lucky enough to have a Fernando's brother-in-law, Erik Fresen, serve on the Education Committee in the Florida House:

In October, Fresen was cleared in an ethics investigation sparked by a complaint that his vote this spring on the high-performing charter schools legislation was a conflict that should have been disclosed. Fresen said he consulted with an attorney in the House of Representatives before making the vote, and he later disclosed his ties to Academica.

It's no surprise Fresen's fellow legislators let him off the hook: charter industry money flows like orange juice around Tallahassee. Thanks to intensive lobbying and targeted campaign contributions, the Florida charter lobby recently scored $91 million in construction costs, all coming from the Public Education Capital Outlay fund, which collects revenues from "the state's gross receipts tax on cable, electric and land-line telephone bills," a highly regressive form of taxation.

So Academica benefits from its political connections - but that's not the only key to its "success." As the Herald reports, South Florida charters, like Academica's, enroll very few poor or special needs students, which serves the dual function of bumping up tests scores while keeping costs low. Miami's charters also appear to engage in targeted marketing:

In 2009, a Miami-Dade school district study of middle-schoolers found that while black students and poor students were less likely to transfer to charter schools, those who were classified as gifted or had earned high marks on the Florida Comprehensive Assessment Tests were more likely to choose charter schools.

The report also found that advanced students were nearly twice as likely to transfer to schools in the Mater and Doral networks of schools as to continue in their home schools.

“It is unlikely that the effects seen for these particular schools can be explained by direct marketing techniques, which are typically ineffective, given that these effects are not seen in other charter schools,” the report concluded. “This raises the possibility that specific students were targeted in some way.” [emphasis mine]

That's particularly interesting regarding SLAM, which has specifically billed itself as a sports-oriented school. The charter just signed up Rich Hofman, a renowned private school baseball coach, as its Athletic Director. I've reported before on the growing national trend of sports-oriented charters, many of which are engaging in unethical recruiting practices; I'd suggest that SLAM needs to be watched very carefully in this upcoming season.

In any case, Academica has developed a bit of a problem: while the schools continue to make gobs of money, they are attracting unwanted publicity - and that's keeping the Florida charter industry from getting everything they crave. The "parent trigger," a mechanism to expand charters, has gone down twice in the Florida Senate, and that $91 million in funds for charter construction isn't recurring, which is what the charter industry desperately wanted. For the Zuluetas and their compatriots to take even more taxpayer funds, they have to splash some perfume on the charter school pig.

Enter Pitbull. It's safe to say the rapper is one of the most image-conscious performers in hip-hop: he's carefully cultivated an persona that gives him "street cred" while remaining palatable to mainstream America:

I remember it well. It was eight years ago, nighttime, and I sat inside an empty banquet hall at the Radisson Hotel in Dallas. Rapper Pitbull sat in front of me. The room was dimly lit. A couple of things about him immediately struck me. His only piece of jewelry was a watch. A nice watch, but hardly anything fancy or shiny. I would learn during our conversation that his mother advised him to look like “old money,” meaning no gaudy bling blinding you from the sparkling glare. She told him that if he decked himself out in expensive clothes and ostentatious jewelry he would look like “new money,” and the sycophants would want to bleed him dry of cash.

Pitbull still heeds mama’s words. Today he has international fame and total assimilation into the Anglo world of hip-hop, which he’s parlayed into product endorsements, TV and film appearances and recorded featured spots on singles by Jennifer Lopez, Enrique Iglesias and Taio Cruz, among others. Pitbull’s image, however, remains all about simple yet elegantly tailored suits, sunglasses and that’s it. Still no obnoxious bling. [emphasis mine]

It speaks volumes about our culture that a man who writes the lyrics Pitbull does can remain in the mainstream of American culture. But he has, and it's paid off in a series of product endorsements:

He’s one of the most aggressive celebrity product and brand endorsers, having struck deals with Kodak, Dr. Pepper, Sheets energy strips, and several other brands. Guided by brand manager Daymond John, the founder of the FUBU clothing line and the star of the ABC Show “Shark Tank,” Pitbull actively searches out companies to align with, often with the goal of endorsing products in exchange for equity in the companies. He receives stock for some endorsements and gets upfront cash payments for others.

“It all depends on how you look at a deal and break it down. Different deals get struck differently,” Pitbull said. He said the equity deals tend to come about when a company is looking for the recording artist to help launch a relatively unknown product that needs a boost from a celebrity. In Pitbull’s case, his penetration into international markets has been an asset in the negotiations for new deals. [emphasis mine]

You can see why charter industry types like the Zuluetas would want to partner up with Pitbull, a shameless self-marketer who appeals to political conservatives (Pitbull is passionately anti-Castro) and is tied into South Florida's youth and Hispanic markets. And so Pitbull has been making the rounds and promoting the proliferation of charters in Miami-Dade. Here he is taping a television special at a Mater Academy school in Hialeah Gardens:

You'll notice that none of these media appearances mentions Academica, the Zuluetas, or the money the South Florida charter industry is scooping in at the expense of Miami's public schools. What we get instead is a prefabricated Horatio Alger story designed to tug at our heartstrings:

You might think the biggest moment in Pitbull’s life would be getting signed to a label or his first record hitting stores, but Pitbull said neither are his biggest moments. Getting the key to the city, said Pitbull, was the biggest moment of his life.

“It is always a big day for a Cuban to get a key and I got the key to the city,” Pitbull joked.

And who gave Pitbull the key to Miami? Why, none other than Mayor Tomas Regalado: you remember, the same fellow who now complains Pitbull's partners in SLAM, the Miami Marlins, "raped" the taxpayers. Regalado has himself been a promoter of Miami's charters, especially the Mater Academy schools.

Public money for the wealthy to build sports stadiums and get even richer? Outrageous! Public money for the wealthy to build charter schools and get even richer? Meh...

Let me hasten to add this: in all my research, I couldn't find any indication that Pitbull himself is making a dime off of SLAM. He may well be doing this out of the goodness of his heart (although it certainly isn't hurting his image, which is how he makes his money). There has also been scant little reporting about the financial structure of SLAM - we simply don't know how Academica, the Zuluetas, Mater Academies, the Marlins, and Pitbull have structured their deal.

Which is precisely the problem. This entire enterprise is using taxpayer money to fund a school affiliated with people who have already made piles of money from the Florida charter industry. And yet - save for the outstanding work of the Miami Herald - a sycophantic press has not given us any insight into the finances of SLAM.

What does it say about Joel Klein and Arne Duncan that they will share the stage this week with Pitbull and push the gospel of charter school salvation, even as the deals that fund these charters don't meet the simplest standards of transparency?

What does it say about our press that they are so taken with celebrity journalism that they refuse to do their jobs and look into the backgrounds of schools like SLAM - schools that are enriching operators like the Zuluetas to the tune of millions?

And what does it say about our culture that we hold up a beer salesman like Pitbull as an exemplar of our education system?

For a moment there, I considered calling for Pitbull to step down as a speaker at the National Charter Schools Conference. But it's clear to me now he is the best possible spokesman for the charter "movement." Pitbull is, indeed, the very personification of everything charter schools seem to stand for.
Let him stand on that stage and represent the charter industry; I really can't think of anyone who would do a better job.

Thanks Eileen! What I really want to see, and can't find, is the report the Herald references from 2008 that shows charters may be engaging in practices of recruiting high-achievening kids. Unable to locate so far...

Why do you think the hedge funds are into education? The property money to make as these guys are doing. This is the same financial property games I have seen with religious cults also. Tax free is the game along with the tax benefits which allow hedge funds to double their money in 7 years instead of 12 years according to their own bragging. This is the new large profit center and they are going to rape and maim for all they are worth along with being able to control how they think by controlling the education system. Anti-Casto in Miami, well, do what you want. Why do we allow our foreign policy to be controlled by a few crazies in Miami? That is destructive and stupid. Charter schools have always cherry picked. That is why there must be a "Correction Factor" to properly compare the charter schools next to regular public schools. Charter schools and the corporatization and privatization of schools is a financial and social game from hell being laid on us by sociopaths.

While I don't question your information on the finances and politics of charter schools. I think your assumptions about Pitbull are way off base.

I've followed his career from the start and I truly do not believe this is about money for him. My understanding is that he donated a substantial amount of his own money to make that school a reality.

Yes many of his lyrics, particularly from the early days are cringe worthy at times. However his music and attitudes towards women has evolved greatly over his 10 year career. His passion for helping children has been on display for many years it's not some new found interest for the development of the school. As for his politics, like all of us Cuban Americans, he's anti-Castro. However you mistake that with being a conservative. He campaigned for Obama (and likely had a lot to do with the higher than normal percentage of Cubans voting Democrat) He routinely lambasted G.W.Bush ( just listen to his song 8 years of BS) and it's safe to say he and Rubio aren't besties.

Mr. Perez's difficult childhood gave him a passion for education and it's power to change children's lives. So whatever flaws the charter system has, and it seems that there are some definite flaws, don't lambaste decent person for trying to make a difference. The world needs more people who are willing to try.